Think about your typical day. You’ll likely make hundreds of decisions as the day unfolds. A few of these choices will be big and the others small. Unless the choice to be made has heavy impacts, there’s a good chance you could go through your entire day without so much as giving things a second thought.
Your brain is programmed to automatically assess situations and make decisions as efficiently as possible. We don’t wrestle for hours on what shirt to wear to work (well, I’m sure some women probably do ) or how much toothpaste to put on our toothbrush. As humans, we are also very habitual in nature. We develop an ingrained set of patterns to which we customarily adhere.
That’s not to say we are always on autopilot. Of course we consciously go back and forth in trying to evaluate options for certain scenarios. Really, our days are filled with both streamlined, instinctual actions and some instances where we apply additional pontification.
How you approach all of these decisions is called your mindset. It’s the basic foundation by which you make less-involved, quick decisions as well as the more deliberative drawn out ones. Your mindset makes you unique. Sure most of us will have similarities with others in some capacity. But your mindset is part of what makes you, you.
Let me ask you this question though: What are the consequences if your mindset doesn’t naturally take into consideration the financial impacts of your decisions? How damaging can it be if money is not an evaluation criterion you use? Do you even have a money mindset?
My definition of a money mindset: For every action or decision you make, your mind processes and evaluates the financial ramifications.
The NON-Money Mindset in Action
Let me paint a picture of how someone who is lacking a money mindset might progress throughout a typical day:
- Wakes up late and rushes to get out the door. In doing so, skips breakfast. Instead, purchases a pricey (and unhealthy) breakfast on the way to work along with an expensive gourmet coffee – a daily ritual.
- Hears on the radio that favorite band is coming to town for a concert. Rushes to buy front row tickets online as soon as getting to desk at work.
- Pays for the concert tickets with debit card forgetting there are not enough funds in the checking account. Incurs a hefty non-sufficient funds (NSF) fee.
- Heads out to lunch and goes to trendy restaurant that has a high-priced menu.
- Needs to pick up a few things from the store after work and does so without any comparison shopping. Goes to the high end grocery store to get commodity items that could be purchased for less at the discount grocery store.
- On the drive home, sees a car that looks so sleek. Absolutely falls in love with the model and decides soon to purchase one. Makes plans to visit the auto dealership this weekend even though last car was purchased new less than 2 years ago and is not paid off yet.
While there are undoubtedly people like this out there, I’ll admit my example for someone not possessing a money mindset is a bit extreme. I’ve perhaps over-embellished to prove a point – you make decisions involving money multiple times every single day whether you realize it or not.
Why Having a Money Mindset is Critical
Money impacts nearly everything you do in life either directly or indirectly. It’s intricately involved in all of your actions and decisions. Thus, you need to think about the financial aspects for every decision you make. This may require only a few fleeting seconds for very minor choices. Or, by contrast, it could require hours or even days if you’re contemplating a huge life decision. Having a money mindset is imperative though – it must be a part of your decision making process. Here are a few reasons why:
- Save money – If you’re thinking about money when you make a decision, chances are you’ll stand to save quite a bit overall. This isn’t to say you still won’t make absent minded financial mistakes or splurge here and there. You also don’t have to turn into a frugal loner. But you could stand to save a tidy sum by eliminating most negligent or careless decisions which will happen if you adopt a money mindset.
- Brighter future – The cumulative effect of employing a money mindset can be exponential and lead to a much brighter future. Being cognizant of the financial consequences of all your decisions will likely make you tend to err on the side of conservative spending and wise investing. All of that “adds up” over time.
- Peace of mind – Kicking yourself for wasting a bunch of money is all too easy to do after the fact. Using a money mindset will help you to achieve a greater peace of mind. Knowing you did your due diligence will be quite comforting.
Having a money mindset is easy to maintain once you get the hang of it. Just like with anything new, you might have to force yourself in the beginning especially if you’ve spent years not factoring money into your decision making processes.
And here’s a very important distinction. Having a money mindset is not about obsessing over money. The goal isn’t to be a miser and pinch every penny possible. You’re not supposed to stress or freak out about finances. Having a money mindset is merely factoring money into how you make your choices. Upon reflection, you may very well go with the more expensive brand name. Or perhaps you do treat yourself to a concert by your favorite artist after evaluating how the cost will impact your finances. You could even choose to take a job that pays less but offers a more acceptable work/life balance. The key is to involve money into all of your decisions. You’ll encounter instant benefits as soon as you incorporate a money mindset into your life. And, over the long run, such a thought process will pay huge dividends.
Do you have a money mindset? How important do you think having a money mindset is? What steps would you take to improve the financial aspect of your decision making process?
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